Rabobank's latest Wine Quarterly report

The quarterly international wine market report from Rabobank is now available for Q2 2012, and it estimates that global wine inventories are at the lowest point of the past decade. Indications are that after years of oversupply the wine industry has finally moved closer to balance. This tightening inventory comes at a time when consumer demand continues to grow. Fluctuating exchange rates continue to shift the competitive positioning of various countries whilst the sluggish worldwide economy continues to shift demand toward lower priced wines.

As the balance of power subtly shifts in the supply chain, however it is creating margin pressure on wineries that are finding it difficult to pass on the cost increases to consumers in the current environment.

Imports into the US showed sharp increases in the first four months of 2012 as wineries utilized alternative supply sources in light of the tight bulk wine market. Bulk wine imports more than doubled with increases coming from a wide range of suppliers but the greatest growth coming from Chile, Argentina and Australia.

Crops across the world are faring as follows:-
- California crop is expected to be above average
- European grape crop relatively good start despite some storm damage
- Australian harvest up 4% on last year and generally viewed to be of high average quality
- New Zealand harvest down 18% on last year
- South African crop is much larger than expected at 3.5% increase
- Argentinian crop suffered from hail, high winds and drought this year leading to a 22% reduction in production.